Accounts Payable (AP)

Date created: Feb 10, 2023  •   Last updated: Feb 10, 2023

What is Accounts Payable?

Accounts Payable can be found on a company’s Balance Sheet or Statement of Financial Position as part of current liabilities. This account reflects short term obligations the company has to its suppliers for purchased goods and services on credit.

Accounts Payable Formula

ƒ Sum(all invoices received from suppliers and creditors that are due within one year)

How to calculate Accounts Payable

A company receives 3 invoices from various vendors, the first invoice is for $30 and is due net 60 days, the second invoice is for $100 and is due net 30 days, and the third invoice is for $50 due net 30 days. As of month end all of these invoices have not been paid. To calculate accounts payable you need to add these invoices ( $30+$100+$50=$180). The company’s accounts payable totals $180 and will fall under current liabilities on the balance sheet.

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